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Bakke Calls Defendant Sandy Blunt

November 8, 2010

Bakke
calls Sandy Blunt. Served as political
appointee of G. H.W. Bush. Worked at
Bureau of Workers Compensation from 1995-2004 in Ohio.
Was WSI CEO May 1, 2004 to December 2007. April 18, 2007 - October 22, 2007 on paid
administrative leave. WSI policy
handbook outlined chain of command. Take
complaints to direct supervisor, then next level, eventually to CEO. If not resolved, go somewhere else, he didn't
remember where. Said he noticed
inappropriate relationship between Long and Peltz. Lots of time behind closed doors. Organization lost faith in their ability to
go to either Long or Peltz regarding fraternization or sexual harassment. Said he met with Long regarding Peltz
multiple times. He says he remembers one
specific date when they documented it around April 2, 2007. Said considered their relationship had risen
to hostile and offensive environment to others.

This was
language from the WSI handbook.
Fraternization was defined as work environment free from intimate,
romantic, or dating relationship between supervisor and subordinate. Blunt had no evidence. Long denied it, but the organization believed
they were intimate and you can't unring that bell. He consulted with an outside HR person named
Hunter Lott because a witness said Long touched Peltz' butt. Lott said to document it in a side file and
take the sexual harassment policy to his team, have them review, sign and
date. Blunt told Long if the conduct did
not stop he would move the management structure.

Long said
he was loyal to his wife, but said Peltz wanted to have a sexual relationship
because of problems with her husband.
Long agreed about the perception of a relationship and put distance
between them. Blunt said the conduct did
not change and he planned to change their reporting relationship. He said it was particularly bad because of
her position as HR and Long's position as her supervisor. Where else can people go if they're not
confident in going to them?

Said Long
recommended larger than minimum pay raises for Peltz. 18% increase.
Blunt asked for a basis. Long
said the finance position was open, that paid more, Peltz would apply for that
position and they would lose her in HR.
Blunt agreed.

He stored
the side file in a candy drawer that everyone would access. Said did not place in personnel file because
witnesses did not come forward. Without
a witness, it would not be fair to Long.

Went on
leave. Indvik wanted him to work with
Halvorson for continuity. He told
Halvorson of his side file. Halvorson
came back and said those file notes weren't in his drawer. Side file notes made April 2, 2007. So when he got back, he recreated the document
based on the memory he had.

Billie/Jim
notes. Met with employee alleged after
5:00 p.m. in January, Jim slapped Billie on butt. Billie laughed and hit Jim on the arm with a
folder. Employee told this to Cindy
Ternes. Ternes told me. Third party upset but afraid to come
forward.

Talked
with Bjornson by phone. She in California. Called Hunter Lott. Lott advised document issue re SH policy.
Ask to get first hand statement from witness. April 2, 2007 harassment policy signed by all
execs. Jim noted discomfort with strong
attraction Billie had with him. Said he
had to tell his wife. Blunt advised Long
to limit private time, no closed doors, but noted conduct continued. Blunt wanted to change management
structure.

Observed
the two together at Paradiso. After 2
drinks, Billie became amorous. One board
member said "Anyone else notice they were about to throw down right
here?"

Halloween
party. Billie brought children first
year. Jim took Billie's kids trick or
treating around the office. Second year,
they're walking around like they're family, weird.

Regarding
performance audit. Can't argue with the
auditor, we will not win. Then Jim said,
I'm a marine, I'm trained to kill, I will not take this. All of us were under stress, but none of us
got to that level. Got complaints from
Bachler that she and peers can't go to Long because of his protection of
Billie. Employees thought Long favored
Billie because of pay raise.

Chamber
of Commerce meeting. Said they met with
democratic caucuses and republican caucuses, this meeting was business
leaders. Not unusual to meet with
legislators. George Keiser was their
chair of Industry, Business and Labor.
Had nothing to do with election or fund raising. They had an audit. There was alot of press. They wanted the truth about WSI to get
out. Long spoke at the meeting and said
I can write this, my wife can also, WSI does good work. Keiser and Blunt said slow down, we're a
public agency. Blunt said he told the
Chamber of Commerce just to put in a public records request and they would have
to write their own editorials. WSI could
provide facts and bullet points.

Was
concerned about calling Strevak on the cell phone. I said to Jim that's your state cell
phone. I said the minute someone sees
the State Republican Headquarters on that phone, it will invite scrutiny. The next day Long wanted clarity, said he
talked with Jodi and thought this was a violation of the Hatch Act. I said I am a former federal employee, a
George Herbert Walker Bush appointee. I
said the Hatch Act is regarding political fundraising. That's not what we're doing. I said it's ok, we're just providing information. Halvorson came in and said it's
legitimate.

Bakke
said that Long provided testimony that you both acknowledged it was illegal
conduct. Absolutely not. After public records requests came in,
Halvorson and Long went to Strevak's office at Republican headquarters to share
information. Said there was no letter
writing campaign.

Long
noted two comments from Keiser at the Chamber meeting. WSI is the crown jewel of the republican
party and republicans are going to lose WSI.
Blunt said Keiser said neither.

Long
testified regarding requests from auditors that Blunt said if they request 30
pages, give them 100. Blunt said, I said
if they request 3 pages, but it takes 30 to respond, do provide the full record
to protect the agency. This was not an
attempt to hide or bury. That he
understood this would result in a deeper audit and that they provided 10-55
times more information than was required.

Said
Spencer was not computer savvy. He
wanted business contacts from his computer.
There were only 11. That he
personally brought Long along as a witness and as the IT guy, Long could punch
in the password.

Any other
contact about Long and Peltz. One
employee said Billie had Jim wrapped around her little finger. Another time Jim and I had made a
decision. Billie got irate and chewed
Jim out. I said this is what I'm
concerned about.

Discussion
of animosity between Long and Halvorson.
Halvorson said Long insubordinate.
I said he would have to deal with it and if it was still going on when I
returned, I would deal with it.

Regarding
Armstrong, open records. "In Ohio I worked with a
person who said you always give out open records. It's not the discovery but the cover up that
kills you." I brought that to North Dakota. Said WSI employees visited him at his home
when he was on leave. Said board was
explicit that he was on paid leave and he should work with Halvorson for
continuity.

Regarding
Nallie and Hutchings. Long suggested it
was inappropriate to appoint them and not go through a hiring process. The audit said they suggested an open hiring
process, but it was ok to appoint them, but we should put their qualifications
in the file because they weren't there.

Bakke: Long said he was deathly afraid of you. Did he tell you that?

Blunt: No. In
the criminal trial, Long said I was fairly easy to talk to.

Tuntland
objected and wanted the context of that testimony put in the record.

Q-You
told Blunt of concerns regarding spending money.

A-Numerous
conversations. Anything not justified by
the procurement law, Blunt would justify as promotional.

Bakke
asked whether Long was present at meetings regarding the audit.

Bakke: Did he say at meetings that there was
suspected or actual violations of law?

Blunt: Never.

Bakke: Any complaints of unethical activity at WSI?

Blunt: Never.

Blunt
said Halvorson was chosen as interim CEO as he was free of conflicts and the
employees mistrusted Long. Said there
were alot of conflicts with Long, including the media and Billie. Said when he returned on October 22, 2007, he
was unaware Long had filed a whistleblower complaint and that Halvorson was
still handling management while he got up to speed. Said he was not involved in the decision to
put Long on paid administrative leave because he was the subject of the
complaint and that would have been inappropriate. Said he had left the agency in December of
2007, three months before the decision was made to terminate Long.

Was aware
Long was vocal in the media regarding WSI.
Heard him on the Heitkamp show.
Said his comments were patently false and never occurred. Did not understand how he could expect to go
back to the agency. Said he told
Heitkamp he couldn't work with the CEO and he couldn't just take it lying down,
that they should just fire him. He
couldn't expect to just lie like that and then go back.

Tuntland
redirect Blunt.

Tuntland: You said you thought because of his request
for whistleblower protection you thought it was inappropriate for you to
supervise Jim. From the document
whistleblower complaint under heading misuse of Spencer's sick leave, regarding
Spencer's sick leave, it was not only a misapplication of public funds, but
accessing of information given to Spencer for grant writing. Even after you left, he had Halvorson give
Spencer computer information on a daily basis.
Long named Halvorson as a suspected wrongdoer so you thought it was ok
for Halvorson to supervise Long?

Blunt: Yes.

Tuntland: Were you talking to Sonja Nallie when she
said "Jim Long is taking the cops to Armstrong's office"?

Blunt: Not that I recall, no.

Regarding
hiring of Hutchings and Nallie. Tuntland
asked if either were veterans. Blunt
said no. He asked if Blunt was aware
that Veteran's Preference law applies to everyone at the agency but agency
heads, and asked if he'd given veterans an opportunity to apply for those
positions. Blunt: No, because they were appointments.

Tuntland: You said Jim and Billie had performance
related issues and spent alot of time behind closed doors. Were the doors locked? He didn't know. He asked whether he'd ever seen people
adjusting clothing. Blunt said he didn't
think it had to be physical to be inappropriate. Blunt said they could have had meetings in
conference rooms. Tuntland established
that WSI handbook said if there were fraternization, the preferred resolution
is moving one employee from supervision to another, but no action was ever
taken. Blunt said that wasn't fair, he
was seeking to make administrative changes and move Billie to another
supervisor. He said I was going to put
something in Jim's file that could lead to his termination. Under the policy handbook, it refers to
unwanted sexual advances and states such conduct was offensive. Established no evidence of Long sleeping with
Billie or having an affair. Tuntland
established others at WSI had sexual relations that was not considered
offensive. Tuntland pointed out that
they had a policy of nepotism also and asked whether he would consider a
husband supervising a wife offensive to employees. Blunt:
In the case you are referring to, it was legal.

Regarding
the side file. Tim Wahlin's initials
date 10-27-07 were on the recreated document.
Established within first week of returning to agency Blunt gave the
recreated document to Wahlin. Asked
whether Blunt knew Jim had already talked with Quinn. Blunt said he did not. Tuntland said it was in the newspaper. Then Blunt said maybe he did know. Tuntland established Blunt had put this very
sensitive document in his candy drawer which was accessible to many
people. Blunt said he was never aware of
any people digging through that drawer.

Regarding
the sexual harassment policy with signatures, the only member of the executive
team who did not sign it was Halvorson.

Regarding
Chamber meeting, Blunt said there was a political effort to insure the WSI
governance structure was changed. The
meeting at the Chamber was to fashion a response against that change. A change would have put the appointment of
WSI CEO under the Governor. WSI made it
through the session without changes, but the initiated measure did make those
changes.

Blunt
said he never talked with Billie, he talked with Long. Others in the executive team did talk with
Billie. Regarding the harassment policy
meeting, he did not explain why they were having that meeting, did not
expressly say it was because of Jim and Billie.

Blunt
said he became aware of the search warrant of Armstrong's office when Armstrong
called him and said this is a great day, your charges have been dropped. But, a search warrant had been executed. My journal has been seized and copied. That was late Friday. He was reinstated the following Monday.

Tuntland
established the report about Jim patting Billie on the posterior was made three
months after the event and questioned if that showed great concern. Blunt just said he took it seriously.

Regarding
who would become interim CEO, Blunt knew Nallie and Hutchings could not because
they were his Ohio
friends and Bjornson was busy with legal.
He did not recall that Jim had supported Bjornson for the role. He said that Halvorson and Long were the two
choices, but the board made the choice of Halvorson.

Tuntland
established Billie was not aboard during Halloween 2005, so the first Halloween
party was 2006. Halloween 2007, Blunt
had just been reinstated and Tuntland questioned whether Blunt would remember
if Jim was walking around with Billie's kids.
Blunt said that was employee perception and because of the whistleblower
complaint he did not have contact with Jim.

Tuntland: While you were CEO of WSI, Denise Bachler
complained about her supervisor, Tammy Dolan?

Blunt: Don't recall.
Pat Kelly, yes.

Tuntland: Any other supervisors besides Dolan, Kelly
and Jim that she complained about?

Blunt: Don't recall.

Tuntland
established the Chamber of Commerce meeting was the first stakeholder's meeting
Jim had been invited to and that he was never invited to one again.

Back to
Mark Armstrong's journal. Journal said,
talked about ways of solving crisis, everything we do is a risk. And, chair Indvik wanted to be
aggressive. Blunt could remember
neither. Note: Tuntland is not sharing the contents with the
jury on the overhead. He expects them to
read these documents. Tuntland asked if
Blunt were privy to Keiser's comments regarding a public campaign. Blunt said Keiser did not discuss that with
him. May 7th reference to 5 hour meeting
at Steve Cates' house. Blunt said he was
not at the meeting and was not part of plan to oust Riha.

Following
meeting at Chamber, did WSI submit documents in response to a request by Keiser
or Chamber or Strevak? Blunt said that
WSI fulfilled public record requests.
Tuntland: Were any documents
prepared by WSI employees, specifically in response to the Chamber's
request? Blunt said they fulfilled the
request with records they had. They did
not prepare anything and that was a question for Armstrong.

Tuntland: Did you give Jim a copy of the information
you retrieved from Spencer's computer?

Blunt: Don't recall.

Tuntland: Jim had a good knowledge of computers, didn't
he?

Blunt: Yes.

Tuntland: The board wanted you to communicate with
Halvorson regarding WSI while you were on leave?

Blunt: Yes, to stay in contact for continuity.

Tuntland: Why is that not in the board minutes?

Blunt: Indvik said that to me personally, verbally.

Tuntland
established that Halvorson had only directly managed two people at one
time.

Tuntland
established that Long had approved a larger than minimum pay raise for Peltz
and that he had given Blunt justification and Blunt approved of it. He had also approved of larger than normal
pay raises for Spencer, Nallie, Bjornson, Halvorson and Armstrong. There was a discussion of Blunt being
charged with three separate felonies.
One was voluntarily dismissed by the prosecutor. The jury found Blunt guilty on one count and
dismissed one count. Blunt said the
prosecutor had a discovery violation and that is the issue under appeal at the
North Dakota Supreme Court and there was also a Writ of Tertiari at the US
Supreme Court.

Bakke
re-cross.

Bakke
established the contact list off Spencer's computer were contacts from Ohio from workers comp, not business contacts from North Dakota. Blunt said not that he recalled.

When
Blunt removed himself from supervising Long after he returned, Halvorson was
not involved in investigating the whistleblower complaint. Rob Forward, Anne Green, and Tim Wahlin were
and reported to Bjornson.

Said
veteran's preference issue was reviewed by legal team and HR at WSI. Blunt did not remember who assigned Forward
and Wahlin to investigate Long's allegations, but he did not. Said the report was addressed to Blunt and
Halvorson just out of habit. State
auditors report said aware of people suspected of wrongdoing appointing their
own investigator. Blunt said no, this
was a different situation involving Long investigating someone.

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Sue Wilson tells important stories which move politicians to act. She is the Emmy winning director of the media reform documentary "Broadcast Blues" and editor of SueWilsonReports.com.
Broadcast Blues sets its sights on media policy, and www.SueWilsonReports.com turns a critical eye on the media itself.
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